Representational image | Photo: iStockThiruvananthapuram: A huge drop in the share of revenues after the switch-over to the Goods and Services Tax (GST) regime has hurt the state’s finances.
Latest data showed that the state’s share of tax revenues fell by over 50 percent from about Rs 1,200 crore to Rs 500 crore since the GST replaced the multiple taxes levied by the central and state governments.
However, as traders have been given more time for filing returns under the new indirect tax regime and the state has not yet received its share of Integrated GST (iGST), it is expected that the tax revenues could exceed Rs 1,000 crore for the month of July.
Today is the last date for filing returns and payment of taxes under the GST regime.
So far, around 2.5 lakh traders in the state have migrated to the GST network, of which about 80,000 have filed returns for the month of July. The number of businesses who have completed the payment of taxes under the GST for the period under review was about 30,000.
As about 50,000 traders who filed returns have claimed transitional input tax credit, they will not have to make additional returns or payments. It is expected that a majority of the traders who have not yet filed returns would utilize the input tax credit for making payment of taxes. In such a scenario, taxes collected from them for the month of July would be nominal.
Moreover, the Center is yet to share with the states the taxes collected under the GST from inter-state suppliers. It is hoped that the state might get a bigger share while apportioning taxes from inter-state supplies; possibly almost equivalent to the tax revenues generated before the GST subsumed the State value-added tax (VAT).
However, it is to be seen whether the level of tax collection could increase by 20 percent through the GST rollout as claimed by the state government.
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